Kilgore zone will fund road, other upgrades
Nov. 19, 2012 at 11 p.m.
Gregg County commissioners on Monday OK'd the annual report for a special zone established in Kilgore to pay for improvements using future taxes paid by developers.
A Tax Increment Reinvestment Zone was created about two years ago along Texas 42, from Interstate 20 into downtown Kilgore, with a spur along Texas 31 to Fritz Swanson Road.
Known by its initials, a TIRZ provides an incentive for developers by setting aside all or most of the taxes they pay on any improvements they build. That tax money can be used for road improvements, to lay utilities or for other uses such as the environmental or archeological studies required by many projects. They also can buy rights of way.
The Kilgore TIRZ money also can be used for downtown projects such as the Main Street Overlay. The city, Kilgore College and Gregg County are partners in the Kilgore TIRZ.
"For a city like Kilgore, and for the cities that use these tools ... not only does it help someone who wants financial assistance to render their land for development ... it creates the opportunity for everybody to work together, to pool their money and accomplish that tax base expansion (created by developers) more quickly," said Bill Calderon, executive director of the Kilgore Redevelopment Authority that oversees the Kilgore TIRZ.
He said Merritt Partnership is the developer.
While the phenomenon might seem complex, the fund it develops is humble - the three partner governments sent $6,158 of their 2011 tax hauls to the TIRZ account.
"I thought it would be more than that, but it's a start," Gregg County Judge Bill Stoudt said.
Amanda Nobles, executive director of the Kilgore Economic Development Corp., said a TIRZ is especially of use in less urban settings where it's more of a challenge for developers to make money.
A developer of rural properties often cannot make a profit after building roads or making other improvements that investors require. Meanwhile, municipalities require developers to build roads and lay utilities.
"That's just the harsh reality," Nobles said. "Because, cities don't have the finances for that kind of thing. On the other hand, cities need and want development.
"In this situation, the city has come up with a way to say, 'OK, developer. You need to put up half of this money. We the city will put up half of the money, and we'll create a TIRZ.' And all the finances for improvements in that TIRZ , the taxes will go to pay us back. It's a great way to get these things funded and paid for out of future (tax) revenue."
And the tax revenues being used are not from the general fund, which means most people's tax payments are not being applied to a development.
A second TIRZ also has been established in Longview, along Interstate 20 at Eastman Road. Stoudt said another is envisioned in northern Gregg and southern Upshur counties to help pay for the planned East Texas Hourglass highway weaving through Marshall, Longview and Tyler.
Calderon, a Houston attorney whose firm assessed and assembled the Kilgore TIRZ, said there are more than 200 of the special zones statewide.
"They are a tool at catalyzing development," he said. "It also helps grow the tax base - they bring in private capital for infrastructure."